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in Atwater, CA
Both Bank Statement and DSCR loans skip traditional W-2 income verification, but they serve completely different borrowers in Atwater. One focuses on your business deposits, the other on rental property cash flow.
Most self-employed buyers assume DSCR is their only option when they can't document income the traditional way. That's wrong—Bank Statement loans often work better if you're buying a primary residence or second home in Merced County.
Bank Statement loans analyze 12 to 24 months of business or personal bank deposits to calculate your qualifying income. Lenders typically use 50% to 75% of average monthly deposits as income, depending on your business structure.
This works for self-employed W-9 contractors, gig workers, and small business owners buying in Atwater. You need decent credit—usually 620 minimum—and 10% to 20% down depending on the property type and your profile.
Most borrowers use these for primary residences or second homes. Investment properties qualify too, but DSCR often makes more sense for pure rentals since it doesn't require personal income documentation at all.
DSCR loans ignore your personal income completely. Lenders only care if the rental property generates enough rent to cover the mortgage payment, taxes, insurance, and HOA fees.
The property's rental income must exceed monthly debt obligations—ideally by 25% or more. That ratio determines approval, not your tax returns or pay stubs.
These loans only work for investment properties. You cannot use DSCR for a primary residence or second home in Atwater, so they're strictly for landlords and real estate investors building portfolios in Merced County.
The biggest split is property use. Bank Statement loans work for any property type including where you live. DSCR strictly finances rentals—you can't occupy the property at all.
Income source matters just as much. Bank Statement lenders review your deposits and business structure. DSCR lenders pull a rent schedule or appraisal to confirm the property generates enough income, then ignore your personal finances entirely.
Credit and down payment requirements run similar—both typically want 620+ scores and 20% down for most deals. But DSCR loans sometimes allow higher leverage on strong-performing rentals, while Bank Statement loans offer more flexibility on credit compensating factors.
Choose Bank Statement loans if you're self-employed and buying a home to live in around Atwater. They also work if you want an investment property but your rental income alone won't qualify under DSCR ratios.
Go with DSCR if you're an investor buying purely for rental income and the property cash flows well. This is especially smart if your personal tax returns show low income due to write-offs, or if you want to scale a portfolio without hitting debt-to-income limits.
Some borrowers in Merced County use both—Bank Statement for their primary residence, DSCR for their rental properties. We compare pricing across both programs to find the best rate and structure for each deal.
Yes, but DSCR usually offers better terms if the rental income covers debt. Bank Statement works when rental income alone won't qualify you under DSCR ratios.
No. DSCR lenders only verify the property's rental income and ignore your tax returns, W-2s, or bank statements completely.
Rates vary by borrower profile and market conditions. Both are non-QM products with similar pricing, though strong DSCR ratios sometimes get better terms.
No. DSCR loans are strictly for investment properties you rent out, not primary residences or second homes.
Both typically require 620 minimum. Higher scores unlock better rates and lower down payment options on either program.